What do you mean by Cost Accounting?

Answer:
The Classifying, Recording and Appropriate allocation of expenditure for
the determination of the costs of products or service; the relation of these
costs of sales values; and the ascertainment of Profitability.

Cost Accounting may be described as that part of the accounting system

of an organization which is devoted to ascertaining in as precise manner
as possible the costs of a particulars process, batch, job, services or unit
of industrial activity not as end in itself but as a means of controlling all the
factors which influence cost — "The Institute of Chartered Accounts of
England and Wals”.

1. What is the objective of Cost Accounting?

Answer:
The objectives of Cost Accounting are given below:
I. Cost Determination
II. Cost Control
III. Cost for Pricing
IV. Profit determination
V. Budgeting and Planning Operation
VI. Cost for Management Decision

2. What do you mean by Financial Accounting and

Cost Accounting?
Answer:
Financial Accounting:
Financial Accounting and Cost Accounting may be distinguishing with
reference to their Primary objectives.
The main purposes of Financial Accounting are,

I. Recording of transactions concerning the Business;

II. Preparation of necessary accounts & balance sheet as required by
statues particularly in case of companies;
III. Apprising the owners of the "Status" of business as on a particular
date and the results of operations over a period through reports; &
IV. Analysis and interpretation of financial statements which financial
accounting is mainly intended to serve external purpose.

Cost Accounting:
Cost accounting data are required for internal use. It is mainly concerned
with detailed analysis of costs to provide facts required by operating
executives.
These facts are needed for every phases of business activity in relation to:
I. Cost determination with a view to fixing prices or submitting tenders
or quotations;
II. Providing Control information;
III. Assisting in policy determination; and
IV. Preparing short-term and long-term plans.
 Description Taka Taka
Raw Materials:-
Stock 1st January $$$
(+) Purchases $$$
(+) Carriage Inward (Carriage on Purchase) $$$
(-) Stock 31st December ($$$)
(a) Materials Consumed:- $$$$

(+) Direct wages (Productive Wages) $$$

(+) Direct Expenses $$$
(b) Prime Cost:- $$$$

(+) Work or Factory expenses:-

1) Indirect wages (Non-productive wages) $$$
2) Rent, Rents $$$
3) Factoring lighting and fitting $$$
4) Power $$$
5) Repairs and maintenance to plant and machinery $$$
6) Clearing $$$
7) Depreciation of plant and machinery $$$
8) Work stationary $$$
9) Indirect materials $$$
10) Insurance $$$
11) Water $$$
12) Loose tools $$$
13) Direct salaries (proportion) $$$
Works on cost:- $$$$

(+) Opening work in process $$$

$$$$
(-) Closing work in process ($$$)
$$$$
(-) Sale of scrap ($$$) $$$$
(c) Works or factory cost:- (Works Cost) $$$$$

(+) Office and Administration Expenses:-

1. Rent and rants $$$
2. Office salaries $$$
3. Lighting and fitting $$$
4. Insurance $$$
5. Clearing $$$
6. Telephone and postage $$$
7. Printing and Stationary $$$
8. Depreciation of furniture $$$
9. Repairs $$$
10. Legal expenses $$$
11. Audit fees $$$
12. Bank charges $$$
13. Directors salaries (proportion) $$$
Office on cost:- $$$$
(d) Cost of production:- (Total cost) $$$$$
 (+) Opening stock of finished goods $$$$
$$$$$
(-) Closing stock of finished goods ($$$)
(e) Cost of goods sold:- $$$$$

(+) Selling and distribution expense:-

1. Showroom, rent, rents $$$
2. Showroom, lighting & heating $$$
3. Salesman salaries $$$
4. Sales expenses $$$
5. Commissions $$$
6. Printing and stationery $$$
7. Advertising $$$
8. Bad debts $$$
9. Directors salaries (proportion) $$$
10. Postage $$$
11. Running Expenses $$$
12. Insurance $$$
13. Deprecation of delivery vans $$$
14. Debt collection expenses $$$
15. Carriage on sales $$$
16. Carriage and freight outwards $$$
17. Carriage and freight outwards $$$
Selling on cost:- $$$$
(f) Cost of sales:- $$$$$
(+) Net profit $$$
Or
(-) Net loss ($$$)
(g) Sales:- $$$$$$